Career Path 1 – Public Accounting

CPAs in public accounting firms serve as “trusted business advisors” to their clients, helping them to better manage their operations and to accomplish strategic goals. Many professional accountants begin their careers in public accounting because of the experience and exposure that can be gained. Public accounting firms serve a wide range of clients across multiple industries and provide a variety of services including accounting, auditing, tax, and consulting. An accounting professional beginning a career in public accounting is able to learn about accounting operations in a diverse set of entities and industries. This exposure enables professionals to quickly go in and identify essential elements in new organizations – a key benefit obtained from public accounting experience.

Public accounting experience may also be required for licensure. For example, in California, candidates for licensure are required to complete 500 hours of attest experience if a license authorizing the signing of attest reports is desired. Attest experience is most easily obtained by working for a public accounting firm. In Nevada, two years of public accounting experience in a public accounting firm are required for licensure.

Life in public accounting differs greatly depending on the size and type of firm. Here are descriptions of some of the main types.

Big Four

Four international accounting firms dominate the public accounting world. They audit the majority of the world’s public companies along with many of the private companies, governments, and other entities requiring audits. Each firm is actually a network of member firms which shares the firm name, brand, and quality controls. The Big Four are: Deloitte LLP, EY (formerly Ernst & Young), KPMG LLP, and PricewaterhouseCoopers (PWC).

Two key points about life in a Big Four firm: 1) Specialization and 2) Client Size. New professionals beginning their accounting careers in a Big Four firm find themselves more specialized from the beginning. They enter as auditors, or tax accountants, or advisors (consultants) and spend their time in one area. Their clients are the world’s largest firms so these professionals will have exposure to large complex systems and operations.

Mid-Tier Firms

The mid-tier firms are large, national firms and include McGladrey, Grant Thornton, and BDO Seidman. While these firms are similar to the Big Four in providing auditing, tax, and advisory services, their clients are smaller, middle market companies. Beginning professionals will have an opportunity to provide services in more than one area across a greater variety of clients. An additional factor may be the ability to move up faster and to take on more responsibility earlier, due to the smaller size of the clients.

The Remaining Firms (representing the majority in number)

The remainder of the accounting firms range in size from sole proprietorships with a single office to regional firms with multiple offices. These firms typically serve local clients in a given geographic area. Their focus tends to be tax preparation and other related services, e.g., bookkeeping, financial statement preparation, compilations, reviews, and small audits. These firms may have an industry specialization related to their clientele, e.g., not-for-profits or homeowners’ associations. Professionals in these firms will wear many hats and provide the full range of services to their clients. Smaller firms have had the reputation of being more family-friendly as they have been able to offer more flexibility and less overtime.

Public accounting experience can provide a great beginning to a professional accounting career. The type of experience obtained, however, varies widely across the different types of public accounting firms. Look before you leap and consider these differences carefully before making your choice.